MUSTER – INSURANCE COMPANY.

AGREEMENT OF INDEMNITY AND COLLATERAL

This agreement of indemnity and collateral is related specifically to ………… Insurance Company´s. issuance of its Guarantee  MUSTER  # ……./20 . It is also bound by the loan agreement issued to ……………………………………………………… (herein after known as BORROWER) and Guaranteed by  MUSTER  Insurance Company  and further guaranteed by the re-insurers,  Sentinel Insurance Company and a consortium of major western insurers, hereinafter referred to as GUARANTORS.

BORROWER has requested a Guarantee from GUARANTORS for its loan agreement, as delineated by the sample loan agreement and Letter of Intent attached. The BORROWER  has accepted a Guarantee from GUARANTORS  as evidenced by signatures hereon.

Collateral is required to be placed by the Borrower to indemnify the Guarantors in the event of any default on its loan Agreement, and loss associated with that default or any claim, by the  Lender or any other party. The collateral is to be utilized by GUARANTORS to satisfy any call on the Guarantee or claim against the Guarantee.

It is required that the BORROWER indemnifies the GUARANTORS in the event of a call on the Guarantee wherein the GUARANTORS may not  be  indemnified through the collateral. BORROWER has, by signature to this Agreement  , agreed to indemnify and hold GUARANTORS  harmless from any and all liability associated with, and/or call on the Guarantee.

BORROWER  has by signature agreed to place collateral into escrow as delieated below. If the collateral is not sufficient to cover the amount of the call on the guarantee, plus costs incurred by GUARANTORS (if any) then GUARANTORS may, by virtue of the BORROWER´s signature to this agreement proceed against BORROWER for that portion of the claim against the Guarantee (plus costs incurred by GUARANTORS if any , which remain unpaid (due to the insufficiency of the collateral.)

BORROWER herein agrees that , on notice by GUARANTORS of any call on the Guarantee wherein a portion of the claim remains unsatisfied by virtue of insufficiency of collateral, BORROWER shall, within ten days of such notice remit to GUARANTORS, BORROWER´s  share of the claim /call  against the Guarantee.

Should BORROWER  fail to  remit any share of  the claim which remains unpaid, then GUARANTORS will have the immediate right for seizure of all assets,proceed to replace the directors with alternative management, take hold of all operations, income and expenses and will proceed against the BORROWER using any means of collection afforded to any party owed on a debt. The costs of such proceedings, including legal fees, investigative costs, and other costs shall be added to the amount of the actual claim/call on the Guarantee, as against  BORROWER

This agreement of Indemnity will terminate as a debt  instrument  against  BORROWER  in the event  that the Guarantee expires without any call on the Guarantee and the Loan

Agreement issued by the BORROWER  is paid fully by  BORROWER to the Loan Agreement holder as intended. Should there be a call on the Guarantee, which is not satisfied

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in full by  the placement of the Collateral, then this Agreement of Indemnity and Collateral shall be fully enforceable up  to the amount of the Guarantee and any costs expended by GUARANTORS in investigation or defense of the Loan Agreement, payment thereon, or

Guarantee inclusive. The  BORROWER ,  by signature hereto admit to having received benefit  of  GUARANTORS Guarantee, on the assurances to GUARANTORS that BORROWER has the ability and resources within country of domicile of  BORROWER to pay in full on the underlying Loan Agreement issued. And that there shall be no call on the Guarantee, for any reason.

By signature, BORROWER  agrees to  fully  indemnify  GUARANTORS in the event of a loss , and that BORROWER´s assets placed as collateral, as  fully  delineated below.                COLLATERAL

• A total of 100% of common, and treasury stock to be placed in the GUARANTORS escrow by BORROWER  fully assignable to GUARANTORS   in case  of a default and released upon full  complete payment  to Lender.
• A standard UCC agreement or full letter of assignment will be given to GUARANTORS  on all equipment currently in stock as per full inventory  list , or purchases made in the future with Lender funds. On all buildings and equipment  there must be  insurance in place for at least 125% of the purchase price naming the GUARANTORS as the beneficiary.
• Any and all leases and charters shall list GUARANTORS as full beneficiary if a default occurs paying Lenders funds.
• GUARANTOR´s associate, ABN Finance Corporation will delegate and substitute legal title and rights to their agents, HERMESS Management Consulting Trading & Finance Türkei, to put for and on behalf GUARANTOR`s a claim on BORROWER´s property in form of a notarized conveyance. Conveyance will remain in force as long as the loan has not been repaid in full. Fees are born by the BORROWER.

OTHER CONDITIONS

1. BORROWER will provide to GUARANTORS  quarterly financial statements no later than the 15^th  day of the  following quarter. The statement  to include profit and loss and operating expenses.
2. A complete running bordereaux inventory  must be kept daily with purchase prices, storage costs,repair costs , location of all equipment, UCC file number. All back up data including invoices must be kept in orderly files per numbered inventory “card-ex “ system.
3. In the event of any one of the occurrences listed below , upon receipt of a written notice to BORROWER, GUARANTORS will excercise the option herein granted of releasing all escrowed stock ( as referred to in # 1 above) and shall therefore have immediate voting rights to such stock.
4. Upon GUARANTORS acquisition of stock existing management  will be  retained for an additional 90 days with the right  to cure any deficit  or occurrences. During the 90 day period GUARANTORS will have the option  of appointing a day to day representative to monitor and participate in management. Such representative will be compensated at the rate of US$ 1,500 per week plus reasonable 

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If at the end of the 90 day  cure period the deficit or occurrence has been cured GUARANTORS  will redeposit the said stock in escrow and withdraw its representative.  If the deficit continues GUARANTORS will exercise the option to discontinue providing

Financial Guaranty´s to the BORROWER  or accept additional collateral of  a Fidelity Bond  and Errors and Omissions insurance policy issued in favour of GUARANTORS.

DEFINITIONS AND/ OR OCCURRENCES

• Failure to pay any required monthly interest payments within 15 days of the Loan Agreement due dates.
• Failure to pay the Lender the Loan Agreement principal within 30 days of the due date.

FRAUD OR DECEIT

Should there be discovered any Fraud or Deceit in the obtaining of the Guarantee or in any aspect thereto for any reason ( regardless of the time of the discovery before or after any Guarantee call), including but not limited to the supply of the collateral , or in the indemnification against any claim or loss by the BORROWER, then it  is understood by this BORROWER, that GUARANTORS and should GUARANTORS  be damaged in any way by holding of the Guarantee as valid though clauses clearly indicate the Guarantee  will be void  in this case, then GUARANTORS shall upon notice, exercise its voting rights associated with the stock held in escrow, and should GUARANTORS be damaged in any way due to Fraud or Deceit  in the obtaining of the Guarantee or in any aspect thereto , that GUARANTORS  be permitted to seek damages against the BORROWER  to include costs of collection and any legal fee

ASSIGMENT OF GUARANTEE

It is agreed and understood that GUARANTORS  or the BORROWER may assign this Agreement of Indemnity and Collateral to any other company , upon written request  and approval of both parties.

Signed this                       day of           20

For MUSTER                                                                                           Witness

Mr.

Authorised Signature

Signed this                      day of            20

For Principal

BORROWER                                                                                      Witness

………. INSURANCE COMPANY.

MASTER GUARANTEE

MUSTER * …./20

MASTER GUARANTEE

FOR

ISSUE DATE :

…………..INSURANCE COMPANY.

7         MASTER GUARANTEE

8         CIC #  00.. / 20

9        MASTER GUARANTEE FOR ……………………………………………………….  (hereinafter known as  Borrower ) and  ………… Insurance Company ( hereinafter known as MUSTER ) a company registered in Turkish Republic of ………………. are authorised in accordance with their by-laws to enter into Corporate Guarantees. Therefore CIC  hereby issues this guarantee in favour of BORROWER for benefit of  hereinafter known as the LENDER each of whom the BORROWER has given an individual note and guarantee of repayment  of investment under terms and conditions outlined in the Loan Agreement (hereinafter known as the Note). Copy of Note shall be attached to and form part of this Master Guarantee. If another form of Note is used,without the prior approval of  MUSTER  this Master Guarantee becomes null and void in respect to all transactions accepted on any unapproved Note.

• Master Guarantee MUSTER # 00../2001 is valid for a total limit of US$ ……000,000
• The fee for this Master Guarantee is as per agreed between the parties and payable at issuance of this Master Guarantee and is automatically renewable every twelve months. Fee amount is fixed during the period of the loan and will not be increased until the Master Guarantee is terminated unless a call is made during the Master Guarantee period and terms will then be as agreed between MUSTER and BORROWER in line with the Loan Agreement. In the event of non payment of the agreed fee then this Master Guarantee and associated Re-insurance Guarantees become null and void.
• All collateral as agreed by the attached document herein known as the “ Collateral and Indemnity Agreement” shall become one with this Master Guarantee. This Master Guarantee is void without the provision of the completed Collateral and Indemnity Agreement and provision of collateral as specified therein.
• Default – Is defined as the failure of BORROWER to make payment when due to the LENDER under terms of the Note. Following default , the LENDER must notify MUSTER at the aforementioned address by courier or registered mail of such default and give MUSTER the right to cure such default within 30 days. In consideration of the aformentioned MUSTER undertakes to pay without protest any legitimate claim made upon BORROWER by LENDER  following a BORROWER default (as hereinafter defined, and failure to cure such default within 30 days. The LENDER at their option can right any default by replacing BORROWER without protest from the lending bank provided original default has been cured.The maximum limit of DEV´s liability under this Guarantee shall as issued to the LENDER and as hereinafter defined as the amount of the Note.                  A demand for payment must be accompanied by;

1. The original or certified copy of the Note.
2. The original or certified copy of this Guarantee
3. A certified copy of original demand made on the BORROWER.

Upon and to the extent MUSTER  has made payment of loss under this Master Guarantee, MUSTER  shall be subrogated to the LENDER all rights and actions against BORROWER and any other person or organization liable to the LENDER under the terms of the

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defaulted Note and in connection with the payment made by other parties. At the request of MUSTER  the LENDER shall execute and deliver all instruments and papers and whatsoever else is necessary to transfer assign and secure such rights and the LENDER

shall do nothing to prejudice such rights.The execution by the LENDER of a release, satisfaction or waiver of the right to collect the unpaid balance of the Note shall equally release MUSTER  and the Re-insurers, from any further obligation under this Master Guarantee,without the need of declaring such release in writing.The maximum amount of this Guarantee shall not be more than US$ …,00,000 (United States Dollars ………….. Million as principal) .

• Transferability – This Guarantee is not divisible or transferable. In the event of an investment being sold or transferred MUSTER must be advised in writing within seven (7) days and if required by LENDER a new Guarantee will be issued to the new LENDER.
• Term – This Guarantee is valid for twelve months from the date the loan is issued and is automatically renewable subject terms and conditions as agreed between MUSTER and BORROWER  in line with the Loan Agreement. Any obligation of  MUSTER  hereunder shall be considered in excess over any other valid Bond or other indemnity covering loss hereunder.
• Fraud – The LENDER shall exercise normal prudent business practice in effecting the Agreement with the BORROWER. This Guarantee is rendered void upon the discovery of fraud or misrepresentation on the part of the BORROWER and or the LENDER
• The Note – The Note is defined as the document, which shall mean issued by the BORROWER in the name of the LENDER specifying the amount and details of the investment made by LENDER.
• The Guarantee – It is understood that this guarantee has been issued by a company not domiciled or licensed in the United States Of America. The financial gaurantee is not considered an insurance product but is a contractual guarantee and guaranteed by MUSTER , the Re-insurer(s) and BORROWER  by their corporate assets guaranteeing payments to the LENDER.. All parties agree that any legal proceedings will be conducted within the purview of corporate law and not insurance law..
• Arbitration – It is the intention of the contracting parties that , when an amicable understanding in the interpretation of this Agreement cannot be reached,any such disagreements shall be decided by means of arbitration,which shall be done by an ad-hoc court of arbitration in Turkish Republic of …………………………….. The arbitrators will be empowered to decide all questions on an equitable basis and with regard of the customary practice of the business, and not exclusively of the strict law.The arbitrator´s awarding will be final and shall be binding to the contracting parties and to third parties, irrespective of the country where they reside, and shall be enforced by international authorities.
•  

The ad-hoc court of arbitration shall consist of three arbitrators. When a demand for arbitration is validly notified by one of the parties, both contracting parties shall appoint one arbitrator within the following week.

Failure to do so within said time frame will entitle the complying  party to claim damages before a Civil Judge or the ad-hoc court of arbitration,which will require the payment of the damages caused by said delay in its final awarding.,regardless of which the non-compliant party may be declared to be in the merits of the case.These two arbitrators shall then select  the arbitrator within the following week after their appointment and they will

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sign together a compromise clause in which they will state the scope,expenses and limitation of the arbitration. Each contracting party will pay the fees of their respect

arbitrator and half the fees of  the third arbitrator.

• Valid Notification – Any and all notices or other communication required  or desired shall be validly given or made in writing by messenger, fax or telecopier or deposited in the Turkish Republic of …………………. mail and or courier postage pre paid, by registered or certified mail ( return receipt requested ) and addressed to the party below:

……………..Insurance Company c/o

Signed on behalf of

………………..  Insurance Company

Mr.

Authorised Signatory

Master Guarantee  MUSTER  00../20 

For and on behalf of

……………………………………………

Authorised Signatory